Benin: deputies adopt a new legal framework for the microfinance sector
The National Assembly of Benin has reached a critical stage in the modernization of the microfinance sector. On Tuesday, June 24, the deputies of the 9th legislature unanimously adopted Law N°2025-14, a text praised by the entire political class for its structural advances and the major clarifications it brings to a sector that has become strategic for financial inclusion and economic development.
Presented by the Finance Committee under the leadership of its president, the honorable Gérard Gbénonchi, the report on this reform highlights several innovations. One of the most symbolic is the new requirement for microfinance institutions (MFIs) to establish a Board of Directors. This provision is a break from past practices and aims to strengthen internal governance and transparency in the sector.
In addition to this governance requirement, the new text redefines the roles of the supervisory authority, expands the activities authorized for MFIs, establishes a minimum share capital, and introduces more stringent prudential requirements. It also aims to better regulate Islamic finance, to reinforce accounting standards, and to provide increased protection for cooperators. All of this is part of a broader plan to clean up the sector, without compromising the goal of financial inclusion.
In the chambers, the general debate enabled parliamentarians to praise the spirit of the reform while raising concrete concerns. Deputy Abou Torou of the progressive Union Le Renouveau, highlighted the increasing over-indebtedness phenomenon observed among some microcredit beneficiaries. He advocated for the establishment of a national information platform to avoid “ponzi scheme” practices between different MFIs, a behavior with a high risk for the sector’s financial balance.
For his part, Benoît Dègla, from the Republican Bloc, stressed the need to harmonize the guarantees required by MFIs and to speed up the processing times for credit applications. He also lamented the continued existence of informal structures, despite the regulation efforts.
Within the opposition, Deputy Hélène Olossoumaï, from the Democrats party, expressed her support for the reform, emphasizing that microfinance remains a crucial tool in the fight against poverty and promoting local development. She invited all lawmakers to support the executive branch in the implementation of the new legislative framework.
The discussions also addressed the issue of protecting MFIs from dishonest clients. Deputy Arouna Issiaka specifically mentioned the need to secure the claims of institutions, while ensuring an ethical and fair framework for borrowers. In response to these concerns, a 12-month deadline has been granted to MFIs to comply with the new law, which includes 173 articles divided into ten titles.
With this ambitious reform, Benin is establishing a modernized legal framework, adapted to the challenges of the sector. The goal is clear: to restore trust, ensure the viability of microfinance institutions, and promote more inclusive and sustainable economic development.
Comments